Automated vehicle innovation and update by consumers. The motivation here is pretty simple. If these vehicles are in fact safer, and i think we all think they will be, that any policy that results in unnecessary costs or delay will result in additional property damage, injury and death. So death by regulation is really something to be concerned about. And i know for a fact that there are people within the federal policy making world, are cognizant of this fact. So what i think nhtsa should do is focus on the federal Motor VehicleSafety Standards that may innovate techno lodge innovation in our automated world. An example was this petition from tesla motors to nhtsa regarding fmbss 11, and they were seeking to comply with the mirror rules with cameras, rather than using mirrors. Even if tesla were to replace all mirrors viewing functions with cameras, they would still be required to install mirrors. I think this is an early example. They just want to have the option to comply with mirrors. I think well run into a lot more of these Going Forward as Automated Vehicles get more and more advanced. So if congress is to do anything, and i dont think they should do anything at this point, perhaps not even in the future, they should have nhtsa report on these potential conflicts. Im not sure what well get out of this. At least its a starting point and its something that congress can sort of use as a jumoff point. Now, like i said, theres already some examples. And this quote is from d. C. Council member shay, her criticism of my bill that ultimately had passed. Ill get to why this is flawed in a second. She was under the belief that it was the technology that was currently then, that may have been true briefly. Its certainly not true now. I think youll see why in a second. So im going to use washington, d. C. , were all here, as the case study. 2012, this bill is introduced. The original bill from Council Member shane, all vehicles be powered by alternative fuels. Impose a new mileage based tax on all Autonomous Vehicles. If you can see, theres a logic here. Council member shay got a ride in one of googles Toyota Priuses and realized, if all of these Automated Vehicles are going to be powered by alternative fuels, theyre not going to be paying the fuel tax, so we need to tax them somehow. Theres a logic there, i just dont think its a good logic. And mandating a licensed driver be in the seat with autonomous operation. That driver seat rule remained. If you look at the april 2014 proposed rules, from these, youll notice that they seem to require that an operator have a special d. C. Drivers license endorsement. So the implication there is that the district is calling for or calling that all test drivers be d. C. Residents and have a drivers license issued by the district of columbia. Given that we live in a metropolitan area where most people live outside of the district of columbia, even from a regional perspective, that seems to be restricting your potential test driver pool unnecessarily. So i think thats a sort of a ridiculous requirement. And hopefully the final rules wont reflect that. But, you know, beating up on d. C. Is easy. California and michigan also have these driver seat requirements. So california, ill focus on them now. So, california, theyre another place they rolled out their manufactured testing rules earlier this year. They imposed this drive seat rule. As randal showed you that video of the latest prototypes, google developed this pod car, lowspeed vehicle. And they want to take out the Steering Wheel and pedals and basically be fully automated. The operator will have no ability to retake, or take Manual Control at any point. But state testing, and federal lowspeed vehicle rules require the installation of the Steering Wheel, all this stuff they dont want. What we have here is a regulator promulgating a rule forcing the innovator to take a step back. Were already having negative impacts from regulation of Autonomous Vehicles. This is really unfortunate. I dont think it was intentional. It just goes to show, you know which roads good intentions can pave. So the vehicletovehicle Communications Mandate that randall mentioned, nhtsa did issue an advanced notice of rule making in august. What they wanted to do is they wanted to develop a final rule by the end of the decade that will require all new highway vehicles be enabled with dedicated shortrange communications, vehicletovehicle technology. And this mandate wouldnt be requiring that all cars have these little yellow circles around them. What the d. O. T. Image is trying to illustrate is the cars will be talking to each other. They wouldnt be completely reliant on onboard sensors. For instance, in finding hazards. And keep in mind, this is not for automation. Theyre talking solely about warning drivers of hazards. Imagine theres a car, a few car lengths ahead of you, slams on its brakes. This would send some data back to your car and tell you, hey, some guy slammed on his brakes ahead of you. Take whatever action the car is going to tell you to take. It remains to be seen how effective that will be, or how drivers would actually respond to that in real world settings. So theres some problems with the vtov mandate. The proponents argue its low cost. Theyre imagining that all new vehicles will have these vtov boxes in the car that will communicate with each other. Others say it will cost a few hundred dollars. Whats the big deal. Were looking at 25,000. So this isnt a big increase in the sticker price. The problem is, that the benefits are likely to be very low in the short run. Were going to have these things are at earliest, were expecting a mandate by 2020. Its going to take at least ten years before you have significant Market Penetration for the auto fleet to turn over, that this is going to do any good for anyone. I mean, i think you need about 70 of vehicles enabled for you encountering one on the road to be greater than shant. We expect it to take at least ten years, if we proceed as nhtsa appears to want to do right now. Dsrc has had this 75 megahertz has been blocked off since 1999. The proponents obviously want to keep it blocked off for transportation purposes only. But there are forces out there, namely those who make consumer electronic or portable Electronic Devices that are wifi enabled that would love to have access to the spectrum. Theres a battle going on at the ftc that hasnt been resolved yet over the spectrum. I think that reason alone, i think it makes premature for nhtsa to dive into this, but they thought otherwise. They ignore competing technologies. Nokia earlier this year announced it has developed an advanced form of lte, that would be able to perform these same vehicletovehicle communications functions. But you would be able to use technology you would be able to use things like cell phones much more easily. And we already have an lte Network Infrastructure out there. When we get into sort of more precise vehicletoinfrastructure kind of applications, that would require, if were dealing with dsrc installing a lot of roadside boxes, and we just frankly dont have the money for that. Nhtsa has ignored some of these technologies. There is a chance its already obsolete, too. If were talking 2030, 2035, that, you know, what good is at least the way nhtsa is imagining this, and not that the context of automation is not bad. If you have a fully a selfdriving vehicle, we have no responsibility to take control of that vehicle at any point. Perhaps not even the ability, what good is a warning light, or audible alert going to do for you. The answer is not much. Theres some unanswered cybersecurity and liability questions. This proceeding just opened an industry thats very interested in these. Theyre very concerned. As far as an automation specific cybersecurity potential problem, well, if you have automation based on sensors and onboard computers, how would a vtovk mandated vtov system, its onboard the car, how will the two systems interact, if at all. So thats why i think the best case for fully Automated Vehicles under this vtov mandate as currently conceived is automakers will be forced to install completely Useless Technology in Autonomous Vehicles. That might not be bad, but that would certainly increase the price. And that gets back to unnecessarily delaying the rollout to the consumers. I think the takeaway for vtov and dsrc, how nhtsa currently envisions it, we should be skeptical. Vtov is so valuable automakers would not consider installing it voluntarily. There may be legitimate institutional problems with industry collaborating on standards. But then perhaps those should be addressed directly, rather than forcing a mandate down everyones throat. So im going to end with some sound Automated VehiclePublic Policy principles. That i think are sound principles. I think we should start with recognizing and promoting the huge potential benefits. I talked a lot about the safety. Randal did mention these traditionally, mobility disadvantaged populations, the disabled, the elderly and the youth who dont have access to the mobility many of us take for granted. We should reject the precautionary principle. This is a new technology. We dont have data. It doesnt mean we should shift the burden to the innovators and say, you need to prove that this is safe. Before we get these to consumers. I dont think any auto manufacturer is going to release to the Consumer Market until theres some demonstrated safety level. But i think going down a precautionary principle route is a good way to keep these out of the hands of normal people. We shouldnt presume to know how the technology and law will evolve. The technology right now, were talking about proprietary things. The only thing we know about this is generally the kind of the press releases we get from industry thats currently developing this. And the law theres no court cases yet. We dont know how this is going to do we need legislative intervention to update our liability laws, things like that . We dont know. Theres certainly a possibility that common law liability can evolve without any sort of intervention. And then, i think, you know, number four logically follows, we should always seek to minimize legislative and regulatory intervention. Regulators are slow, however well intentioned. This is moving pretty quickly. We should let the innovators innovate, and keep the regulators as far away from these things as possible. Doing maybe some very minor things around the edges, but they shouldnt be involved in the sort of developing the technology. Or deploying the technology. And then finally, once we get to the state where were talking about, you know, updating Motor Vehicle codes to reflect this new automated world, and really doing some serious legislating, if it comes to that, we should focus on developing clear and simple rules that have neutrality. I see a big risk of the first mover. So the First Company that ends up with a consumerready vehicle coming to market, and then regulators saying, well, were done, this is the technology were going to mandate, i think its a terrible idea to mandate technology in generation one, despite the fact that regulators may believe that this will enable to get generation one tech out to consumers more rapidly. So with that, i am finished. And i look forward to any questions. Thank you very much. Thank you, marc. Our next speaker is adam thierer. Hes a Senior Research fellow with the policy program at george mason university. He specializes in technology, media, internet and free speech policies. His writings have appeared in the wall street journal, the economist, washington post. Adam has authored or edited eight books ranging from media regulation and child safety issues and High Technology market. His latest book is the continuing case for comprehensive technological freedom. Adam was president of the progress and freedom foundation, director of telecommunications here at cato. He got his masters in Business Management at the university of maryland. And his bachelors in journalism at indiana university. Adam . Thanks, matthew. And great to be back here at cato. Its always a pleasure. Its also a pleasure to follow randal and marc. I learned a lot from what theyve both written on this, and many other issues. And i recommend it to all of you. My remarks will be focused primarily on the privacy and Security Technologies in Driverless Cars. You can download my paper from the cato website. In thinking about privacy and security in smart cars, or Driverless Cars, we need to begin first by understanding, acknowledging that security and privacy are relative concepts, with very amore fosed boundaries. Not everyone affixes the same values on this. Some people are hyper cautious, and hypersensitive about the privacy. Others are risk takers that are just somewhat indifferent or more pragmatic about their privacy. We all say we love our privacy, but sometimes we do things that actually in the real world act differently. This is called the socalled privacy paradox. We should understand the security and privacy norms tend to evolve over time. And do so very rapidly. With any new highly disruptive technology, such as Intelligent Vehicle Technology, we often panic at first. Especially about the privacy situations of the new technologies such as these. But we establish new ethical and legal base lines about new technologies fairly rapidly. Ive written about this in recent law review articles and in my new book. Theres essentially as i describe it in that work, a cycle of work of initial resistance to a technology, gradual adaptation, and then eventual assimilation of that technology into our lives. Not without some heartburn along the way, of course. This was just as true for the first cars that came along over a century ago and it will be true for the new smart car technologies that are evolving today. But it is especially true that these norms have all as it pertains to privacy and security, that theyre subjective and relevant. Third point, for almost every perceived privacy or security concern or harm, there is a corresponding consumer benefit that sometimes balances those out, or even outweighs those perceived harms or fears. We see this reality at work with the broader internet. And with digital technologies. And well see it at work with shall driverless vehicles. Compare todays telemattics and Intelligent Technologies one board our cars with the tracking technologies onboard every smartphone that all of you are carrying with you right now. The reality is, these technologies, the ones we carry in our pockets, the ones well have in our cars and already have in our cars today, are capable of tracking us. That sounds sinister. Tracking, of course, creates enormous benefits for us as well. We now know in realtime what traffic looks like when were in our cars, not just because the technology in our cars, because, of course, we can see it on a map. In realtime that happens because were all connected and were all being tracked. So again, we have to be clear that not every theoretical boogieman is just a big bad awful thing to be disposed of. It has a corresponding benefit we have to take into account before we address it. Fourth point. As it pertains to intelligent vehicle technologies, todays privacy and security concerns are not the same as yesterdays and theyre not going to be the same as tomorrow. Todays intelligent vehicle technologies are likely to be more pressing i would argue than tomorrows. Thats things like event data recorders and telemattics are recording our realtime actions today as we are doing them with our hands on the wheel. This raises a variety of interesting questions, which is, can that information be used for automobile insurance purposes. And it is today already on a voluntary purposes. Or breaking the law by driving erratically or too fast. They raise obvious privacy considerations. That may even lead to considerations or concerns about Discrimination Associated with the data thats collected by our vehicle. But its worth asking this question. What happens as we make this transition to fully Autonomous Vehicles. And what happens when our cars are less of a final good that we own and more like a service that we just use or rent on occasion. What happens when we combine the power of todays sharing economy with the power of selfdriving technology. A car of the future may look like a robotic chauffeur, as randal described. Theyre just waiting out for us, we dial them up on our cell phones as we need them. Needless to say, in that environment the privacy considerations are very different than they are today. Clearly we can still be tracked, our activities can be tracked, but not us personally manually operating that vehicle, and so its a different type of consideration. Thats something to take into account. Fifth point. This is the most important point ill make here today, that any security or privacy solution should take into account the source of considerations that ive just outlined, and must be able to accommodate the many different types of views and values that people have as it pertains to privacy and security. I write about this in my recent book, there are no Silver Bullet solutions to concerns about safety, security and privacy. It will be very difficult for law to keep pace with not just rapid innovation in this space, but the rapid evolution of consumers taste and values. This is why we need a flexible layered approach to addressing security and privacy concerns. We need to borrow a phrase from Richard Epstein of chicago, simple rules for a complex world. We need to rely on things like co